Social inequality will curb most of South Africa’s potential productivity gains from AI
The adoption of AI across South Africa’s industries could boost the country’s economic output by 6% over the next decade. That is according to research from Strategy& and PwC, which warns however that this potential can only be unlocked if South Africa ensures equal access for all to training and technology.
The research found that, in South Africa, the number of job postings requiring skills associated with AI increased by 26% in 2023 and a further 8% in 2024. The study also found that occupations exposed to generative AI (GenAI) are seeing faster employment growth compared to jobs where AI skills are not required. From 2021 to 2024, vacancies for jobs that are more exposed to AI increased by 32%, compared to only 14% for less-exposed jobs.
The growth of AI-related jobs reflects the massive potential of the technology. Strategy& and PwC share several examples in their report. For example, in research and development, adopting AI can reduce time-to-market by 50% and lower costs by 30% in industries such as automotive and aerospace.
In the pharmaceutical sector, AI has already helped several companies reduce drug discovery timelines by more than 50%. Meanwhile, half of the manufacturers surveyed said they expect increased sales (57%) and reduced operating costs (50%) due to the positive impact of AI on their operations. Logistics route optimisation, quality control, and supplier management were cited as the top use cases.
In education, AI is playing a pivotal role in personalised learning delivery (for example, language-learning apps) and in improving operational efficiency through the automation of administrative functions.
“AI is a transformative power driving change in the workplace today in a similar way to how the steam engine impacted the first industrial revolution between the late 18th century and the mid-19th century. AI embodies the fourth industrial revolution,” said Lullu Krugel, Chief Economist at PwC South Africa.
The roles most impacted by AI
PwC and Strategy& explored more than 370 job roles to uncover where AI can have the greatest impact – and where AI skills are most needed. In South Africa, education, ICT, agriculture, and professional and scientific roles have the highest share of AI-related skills requirements.
Looking at specific occupations, the following positions face a high potential of certain tasks being performed by AI: business and administration professionals, commercial managers, administrative staff, customer service clerks, and legislators.
In turn, cleaners and helpers, food preparation assistants, building and related trade workers (excluding electricians), and labourers in mining, construction, manufacturing, and transport have the lowest exposure to AI-related skills requirements.
Dayalan Govender, People and Organisation Leader at PwC, said: “When you provide people with the latest technology tools like AI, the skills and guardrails to use them responsibly, and the power to innovate and reinvent how they get work done, the results can be transformative. Employees will accelerate their own ability to collaborate, perform, and boost their productivity with the use of AI.”
“AI does not replace your ability to solve problems but makes you a better problem-solver. And this will free up time for employees, allowing for deeper thought processes to be used for value-adding activities.”
The impact of AI
Building on their AI and worker forecasts, PwC and Strategy& estimate that AI has the potential to boost South Africa’s real GDP by an additional 6% by 2035 if the country can reduce inequality of access and ensure people acquire the skills needed to use AI tools. However, the most likely scenario is a marginal increase in economic output of only 1.2% over the ten-year period under a business-as-usual approach.
“South Africa has a smaller potential economic benefit from AI compared to the global average due to high levels of social inequality – asymmetries in access to income, education, and technology. Due to the country’s dual economic structure – including a marginalised, informal economy with very limited exposure to AI, and a developed economy – the potential aggregate productivity gains from AI are notably smaller,” explained Christie Viljoen, Senior Economist at PwC.
“To ensure that the economic benefits of AI are widely shared across communities, South Africa needs key enablers that will create a labour force educated in, and open to, the benefits of AI across diverse occupations. From a training perspective, upskilling people young and old with AI abilities needs to happen en masse.”
“At a practical level, this will require training young people at high school level and making opportunities available for adults at work and in community centres, for example. It is also important to consider sector-specific AI skills requirements.”
